Hi everyone, I have some properties and my partner has been helping me with collecting the rent and generally managing the tenancies. We aren’t married and are not in a civil partnership but have been living together for at least 12 years. So I read that if you hold the rent for someone (i.e. a landlord) then you would need client money protection. There are all sorts of information on the internet about it such as Protecting clients' money if you're a property agent - GOV.UK
Could someone clarify please if my partner would need to be part of a client money protection scheme if she collects the rent for me, holds it in her account temporarily then sends it over to me? Admittedly she doesn’t send them all immediately, sometimes she holds the holding deposit in there until the full advance rent is received. She also holds the security deposits (which is registered with an insured deposit scheme).
My understanding is that she doesn’t need the client money protection scheme as my partner but I appreciate this is a grey area and we would like to make sure we’re doing it correctly. If anyone asks why she’s doing all this on my behalf, well she wants to contribute towards the business and it’s basically how we divide the work between us and also the profits.
If this is an informal arrangement just between the two of you, then its largely up to you what you do. However, if he is being paid or receiving monies-worth for the service, then he would need to register with one of the redress schemes, (eg ombudsman service) and also with a client money protection scheme if he collects the rents into his own account or in cash.
@David122 So we need to do this despite being partners? If say this is a family business and I was collecting rent for my parents would I also have to be part of a redress scheme and all that?
It can be either although thinking about it, it is your business so it should be in your name with your partner given access. Some banks get funny about people conducting business transactions through a personal account. Traditionally business accounts used to charge a fee for each transaction. I am with Monzo (there are others) and if you use their basic business account it is free. I like the idea of having separate accounts for personal and business.
If the properties are owned by the business and the people involved are employed by the business or Directors of it, then there may be an exemption, (you should check). Likewise, if he is a joint landlord, then he is not acting as a letting agent and would not have to register.